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Jelly Roll Capital Equity Research |
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Market Analysis, Education, and Wall Street-Quality Stock Reports |
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Introducing the Jelly Roll Capital Short 25 |
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Frequent visitors to our site will be familiar with our Top 25 Stocks list, which is published at the start of each month. Our wager is that a portfolio of those 25 stocks will outperform the market averages (we specifically benchmark against the S&P 500) over our time period of approximately 12 months. We do, however, also track month-to-month performance as well as performance over shorter intervals because we believe our quantitative model can select stocks that will be profitable over shorter time frames, all while completely ignoring “technicals” and focusing solely on advanced fundamental ratio analysis. Given the success of our top 25 in the short time we have been publishing it, we felt it would be an interesting experiment to take the bottom 25 stocks and make it into a “short portfolio” and see if we can create, overall, a hedged portfolio that will have both long and short positions outperforming the market. In the past, we have occasionally slapped the “underperform” tag on well-known stocks like General Electric (GE), Sun Microsystems (SUNW), and Electronic Arts (ERTS), but the emphasis of the site has admittedly been to the long side. To remedy this, we will begin to make the short list available in the middle of the month to bridge the gap between “Top 25” updates. Although the exact criteria and weightings used by our model are proprietary and hence we cannot delineate them, the Short 25 will essentially be the inverse of the Top 25 - and since the Top 25 are the companies that are most profitable and best at creating value for shareholders while remaining attractively priced, the Short 25 will be companies that are both expensive and, in our view, destroy value through operations. Look for the short list to appear tomorrow, and best of luck. |